Dear Spirit Customer, We’re Still Flying―into Chapter 11

The morning that Spirit Airlines filed for bankruptcy, the troubled low-cost carrier said to its customers, “The most important thing to know is that you can continue to book and fly now and in the future.”

Maybe not the most important. The “most important thing” wasn’t mentioned in the headline or the 69-word first paragraph of an “open letter” posted before dawn on Nov. 18, 2024. That’s just one of several lessons about crisis communications to be learned by giving a close look at how Spirit informed its customers on the day it filed to restructure its debt under Chapter 11.

Once a pioneer in cheap, no-frills air fares, the Dania Beach, Florida-based company was the most profitable airline in the world before the pandemic. But it hasn’t posted an annual profit since 2020. With $5.36 billion in revenue in 2023, it is the first major passenger airline to file for Chapter 11 since American Airlines in 2011.

In 2022, Spirit shareholders rejected a merger with rival Frontier Airlines, which was backed by CEO Ted Christie and had a better chance of winning antitrust approval by the U.S. Dept. of Justice. Instead, they opted for a higher bid from another competitor, JetBlue. In March, a federal judge blocked the JetBlue deal, saying it would hurt consumers.

After the failed JetBlue merger, Spirit faced a looming deadline to refinance $1.1 billion in bonds, an unlikely result without a bankruptcy filing. Now Spirt has reached a deal with those bondholders to restructure that debt, an agreement that must be approved by a judge.

A bankruptcy filing tests the most talented communications teams. The team must address the questions and worries of employees, customers and the public. When a large publicly held company files for bankruptcy there’s another layer of complexity.

Accordingly, the messages should be tailored to each audience. With nearly 800 daily flights, Spirit customers were a key audience, especially those flying that day or that week.

Get ready
In any litigation, it’s imperative for the public relations team to move quickly once a case is filed. It’s the first, best chance to shape the narrative for the news media.

Spirt filed its Chapter 11 petition for bankruptcy at about 4:46 a.m., court records show. Three minutes later, the company posted the open letter on PR Newswire, a web site that distributes releases to news outlets.

One minute after that, Spirit posted a press release announcing the bankruptcy filing. The company sent emails to customers from Christie, although the exact time could not be determined.

Spirit also posted messages on social media.

Who’s the audience?
As the news broke, reporters referred to Spirit’s open letter before shifting to Christie’s email later in the day, probably because they subscribe to Spirit’s newsletter. The two messages are nearly identical, according to a version of Christie’s letter posted to Email Tuna, a newsletter archive. Here’s how Christie’s email began:

A Message from Ted Christie Our President & CEO

Dear …

Thank you for being a valued Free Spirit® member.

I’m writing to let you know about a proactive step Spirit has taken to position the company for success. Spirit has entered into an agreement with our bondholders that is expected to reduce our total debt, provide increased financial flexibility, position Spirit for long-term success and accelerate investments providing Guests with enhanced travel experiences and greater value. Part of this financial restructuring includes filing a “prearranged” chapter 11.

The most important thing to know is that you can continue to book and fly now and in the future. We also want to assure you that…

We don’t know the subject line, which should have motivated people to open the message. But the bland headline in the body of the email doesn’t inspire hope that the subject line caught anyone’s attention.

Christie’s second lengthy paragraph focuses on the bankruptcy plan and not what customers want to know the morning of the bankruptcy: the status of future flights and the loyalty program.

Bankruptcy, Chapter 11 or otherwise, strikes a nerve with consumers unfamiliar with the law. They read “bankruptcy” and think “out of business.”  Yet that provision of the Bankruptcy Code commonly allows companies to continue operating while reorganizing their finances and debt payments. This needs to be explained.

Instead of explaining this, Christie’s letter spends the second paragraph touting the deal with “increased financial flexibility … long-term success … accelerate investments … enhanced travel experiences and greater value.”

The important thing
Releasing to the news media a message to employees or customers is a sound tactic on two conditions. First, the message is tailored to that audience. By leading with the reorganization plan, Christie’s letter was seemingly aimed at the news media.

Spirit posted a slightly different version of Christie’s letter as a news release. Called an “open letter,” here’s how it starts:

Spirit Airlines Issues Open Letter to All Spirit Guests

DANIA BEACH, Fla., Nov. 18, 2024 /PRNewswire/ — Spirit Airlines, Inc. (“Spirit” or the “Company”) (NYSE: SAVE) today issued the following open letter to all Spirit Guests:

We are writing to let you know about a proactive step Spirit has taken to position the company for success …

The headline doesn’t hint at what the letter is about. The first sentence is gobbledygook to customers, a tradition-bound attempt to comply with PR Newswire’s requirement of “clear source attribution” near the top of the release. Even worse, it’s followed by a jargon-filled dodge – “a proactive step . . . to position the company for success.”

Curiously, the open letter omits Christie’s salutation and first sentence. And it’s not attributed to him, ending with press release boilerplate.

Spirit’s social media compounded the problem. The company posted a link to the cumbersome press release on x.com and Facebook, not the Christie letter.

Making matters worse, Spirit added a curious message: “We’re still flying, so no need to have FOMO!”

Fearing of missing out on what?

What’s important
Here’s one way Spirit could have gotten the “most important thing” into the headline and first sentence:

Spirit Airlines Flying on Schedule After Chapter 11 Filing

Travelers can continue to book flights on Spirit Airlines after the company made a deal with lenders to reduce its total debt that must be approved by the bankruptcy court.

Customers can continue to use all tickets, credits and loyalty points as normal while we obtain approval of our plan under Chapter 11 which we expect to receive by March 2025.

A key ingredient of a good lede, or first sentence, can be forward spin. Give readers the news―the bankruptcy filing―and what will happen next―the airline will continue in the air. A simple recipe.

Then we’d follow with the bullets that explain how business will continue “as normal.” Lastly, we’d summarize the bankruptcy plan in plain language.

We think there’s a better way to reach customers than a news wire. Post a message to the company website, free from the legal mumbo jumbo and media contacts, and then distribute that message via social media.

What’s next?
Debt restructuring aside, Spirit faces plenty of obstacles to its survival. Rising labor costs have made it hard for the company to undercut the major carriers’ ticket prices. Meanwhile, those big carriers have increased flights and cut fares to vacation destinations, once Spirit’s core business.

Gordon Bethune knows Chapter 11 isn’t a cure-all. Before he became CEO of Continental Airlines in 1994, the company had gone through two bankruptcies. He turned Continental around, retiring in 2004. Six years later Continental merged with United Airlines.

A year before his retirement, Bethune told the Chicago Tribune, “A bankruptcy judge can fix your balance sheet, but … cannot fix your company.”

When he flies, Tom Corfman, a senior consultant with Ragan Consulting Group, likes Stroopwafels when they’re offered.

Contact our client team to learn more about how we can help you with your communications. Follow RCG on LinkedIn and subscribe to our weekly newsletter here.